(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Title of each class | Stock symbol | Name of each exchange on which registered |
Emerging growth company |
Exhibit No. | Description |
99.1 | |
101 | Cover page information from Edgewell Personal Care Company's Current Report on Form 8-K filed on November 12, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language). |
Exhibit No. | Description |
99.1 | |
101 | Cover page information from Edgewell Personal Care Company's Current Report on Form 8-K filed on November 12, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language). |
![]() | Edgewell Personal Care Company 6 Research Drive Shelton, Conn 06484 |
FOR IMMEDIATE RELEASE | Company Contact |
Chris Gough Vice President, Investor Relations 203-944-5706 Chris.Gough@Edgewell.com |
• | Net sales were $528.0 million in the fourth quarter of fiscal 2019, a decrease of 1.7% when compared to the prior year quarter, and $2,141.0 million for the full year, a decrease of 4.2% compared to the prior year. Organic net sales were down 0.9% for the quarter and 3.4% for the full year. (Organic basis excludes the sales impact from the Jack Black acquisition, the sale of Playtex gloves assets, and the translational impact from currency movements.) |
• | GAAP Diluted Earnings Per Share ("EPS") for the fourth quarter were $0.75, including the after-tax impact of $0.17 from Project Fuel, and were a loss of $6.52 for the full year fiscal 2019, including the after-tax impact of a non-cash impairment of goodwill and indefinite-lived intangible assets of $8.97 and an $0.80 after tax impact from Project Fuel expenses. Adjusted EPS were $0.86 for the fourth quarter and $3.48 for the full year. |
• | Net cash from operating activities was $191 million, which allowed the Company to reduce its net debt leverage ratio to 2.8 times. |
• | The Company continued to progress its portfolio transformation, announcing that it had reached a definitive agreement to sell the Infant and Pet Care business. |
• | The Company continued to make substantial progress with integration planning related to the pending combination with Harry’s, which is expected to close in the first quarter of calendar year 2020. |
• | The Company analyzes its net revenue on an organic basis to better measure the comparability of results between periods. Organic net sales exclude the impact of changes in foreign currency, acquisitions, and dispositions. This information is provided because these fluctuations can distort the underlying change in net sales either positively or negatively. For the year ended September 30, 2019, the impact of acquisitions includes net sales and segment profit activity for Jack Black through February 2019. For the year ended September 30, 2019, the impact of dispositions includes a negative impact for the October 2017 net sales and segment profit for Playtex gloves assets. |
• | Adjusted EBITDA is defined as earnings before income taxes, interest expense, net, depreciation and amortization and excludes items such as restructuring charges, impairment charges, Harry's combination and integration planning costs, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, and the sale of Playtex gloves assets. |
• | Adjusted operating income is defined as earnings before income taxes, interest expense associated with debt, other income, net, and excludes items such as restructuring charges, impairment charges, Harry's combination and integration planning costs, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, and the sale of Playtex gloves assets. |
• | Adjusted net earnings and adjusted earnings per share are defined as net earnings and diluted earnings per share excluding items such as restructuring charges, impairment charges, Harry's combination and integration planning costs, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, the sale of Playtex gloves assets, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act. |
• | Adjusted effective tax rate is defined as the effective tax rate excluding items such as restructuring charges, impairment charges, Harry's combination and integration planning costs, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, the sale of Playtex gloves assets, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act from the income tax provision and earnings before income taxes. |
• | Adjusted working capital is defined as receivables, less trade allowances in accrued liabilities, plus inventories, less accounts payable, and is calculated using an average of the trailing four-quarter end balances. |
• | Free cash flow is defined as net cash from operating activities less net capital expenditures. Free cash flow conversion is defined as free cash flow as a percentage of net earnings adjusted for the net impact of non-cash impairments. |
Quarter Ended September 30, | Year Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | 528.0 | $ | 537.4 | $ | 2,141.0 | $ | 2,234.4 | |||||||
Cost of products sold | 298.0 | 306.6 | 1,174.4 | 1,201.5 | |||||||||||
Gross profit | 230.0 | 230.8 | 966.6 | 1,032.9 | |||||||||||
Selling, general and administrative expense | 91.8 | 91.6 | 372.0 | 395.1 | |||||||||||
Advertising and sales promotion expense | 59.6 | 63.4 | 250.9 | 293.3 | |||||||||||
Research and development expense | 14.0 | 14.6 | 53.5 | 61.1 | |||||||||||
Impairment charges | — | — | 549.0 | 24.4 | |||||||||||
Restructuring charges | 8.7 | 19.4 | 46.4 | 38.5 | |||||||||||
Sale of Playtex gloves assets | — | — | — | (15.3 | ) | ||||||||||
Pension settlement expense | — | 5.4 | — | 5.4 | |||||||||||
Interest expense associated with debt | 14.6 | 15.5 | 62.6 | 68.0 | |||||||||||
Other expense, net | 0.2 | (2.6 | ) | 1.5 | (1.4 | ) | |||||||||
Earnings (loss) before income taxes | 41.1 | 23.5 | (369.3 | ) | 163.8 | ||||||||||
Income tax (benefit) provision | 0.4 | 4.1 | (16.4 | ) | 60.5 | ||||||||||
Net (loss) earnings | $ | 40.7 | $ | 19.4 | $ | (352.9 | ) | $ | 103.3 | ||||||
Earnings per share: | |||||||||||||||
Basic net (loss) earnings per share | 0.75 | 0.36 | (6.52 | ) | 1.90 | ||||||||||
Diluted net (loss) earnings per share | 0.75 | 0.36 | (6.52 | ) | 1.90 | ||||||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 54.2 | 54.0 | 54.1 | 54.4 | |||||||||||
Diluted | 54.3 | 54.2 | 54.1 | 54.5 |
September 30, 2019 | September 30, 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 341.6 | $ | 266.4 | |||
Trade receivables, less allowance for doubtful accounts | 205.6 | 226.5 | |||||
Inventories | 357.2 | 329.5 | |||||
Other current assets | 140.0 | 128.8 | |||||
Total current assets | 1,044.4 | 951.2 | |||||
Property, plant and equipment, net | 396.0 | 424.1 | |||||
Goodwill | 1,053.8 | 1,450.8 | |||||
Other intangible assets, net | 912.9 | 1,099.0 | |||||
Other assets | 34.8 | 28.2 | |||||
Total assets | $ | 3,441.9 | $ | 3,953.3 | |||
Liabilities and Shareholders' Equity | |||||||
Current liabilities | |||||||
Current maturities of long-term debt | $ | 117.0 | $ | 184.9 | |||
Notes payable | 14.4 | 8.2 | |||||
Accounts payable | 222.8 | 238.4 | |||||
Other current liabilities | 305.4 | 285.5 | |||||
Total current liabilities | 659.6 | 717.0 | |||||
Long-term debt | 1,097.8 | 1,103.8 | |||||
Deferred income tax liabilities | 102.8 | 176.1 | |||||
Other liabilities | 258.9 | 211.8 | |||||
Total liabilities | $ | 2,119.1 | $ | 2,208.7 | |||
Shareholders' equity | |||||||
Common shares | 0.7 | 0.7 | |||||
Additional paid-in capital | 1,627.7 | 1,628.3 | |||||
Retained earnings | 734.1 | 1,083.1 | |||||
Common shares in treasury at cost | (803.8 | ) | (819.2 | ) | |||
Accumulated other comprehensive loss | (235.9 | ) | (148.3 | ) | |||
Total shareholders' equity | 1,322.8 | 1,744.6 | |||||
Total liabilities and shareholders' equity | $ | 3,441.9 | $ | 3,953.3 | |||
Year Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash Flow from Operating Activities | |||||||
Net (loss) earnings | $ | (352.9 | ) | $ | 103.3 | ||
Non-cash restructuring costs | — | 1.8 | |||||
Non-cash sun care reformulation | — | 25.3 | |||||
Depreciation and amortization | 93.8 | 97.6 | |||||
Impairment charges | 549.0 | 24.4 | |||||
Loss (gain) on sale of assets | 1.5 | (10.9 | ) | ||||
Deferred income taxes | (57.9 | ) | 2.3 | ||||
Share-based compensation expense | 17.8 | 17.0 | |||||
Other, net | (5.7 | ) | 19.5 | ||||
Deferred compensation payments | (7.5 | ) | (16.7 | ) | |||
Changes in current assets and liabilities used in operations | (47.5 | ) | (4.2 | ) | |||
Net cash from operating activities | 190.6 | 259.4 | |||||
Cash Flow from Investing Activities | |||||||
Capital expenditures | (58.0 | ) | (62.0 | ) | |||
Collection of deferred purchase price from accounts receivable sold | 9.7 | 9.7 | |||||
Acquisitions, net of cash acquired | — | (90.2 | ) | ||||
Proceeds from sale of assets | 4.1 | 4.7 | |||||
Playtex glove sale | — | 19.0 | |||||
Other, net | (1.3 | ) | — | ||||
Net cash used by investing activities | (45.5 | ) | (118.8 | ) | |||
Cash Flow from Financing Activities | |||||||
Cash proceeds from debt with original maturities greater than 90 days | 434.0 | 550.0 | |||||
Cash payments on debt with original maturities greater than 90 days | (324.0 | ) | (788.0 | ) | |||
Term Loan repayment | (185.0 | ) | — | ||||
Net increase (decrease) in debt with original maturities of 90 days or less | 5.8 | (9.7 | ) | ||||
Employee shares withheld for taxes | (3.0 | ) | (3.1 | ) | |||
Common shares purchased | — | (124.4 | ) | ||||
Net financing inflow from the Accounts Receivable Facility | 8.4 | (4.4 | ) | ||||
Net cash used by financing activities | (63.8 | ) | (379.6 | ) | |||
Effect of exchange rate changes on cash | (6.1 | ) | 2.5 | ||||
Net increase (decrease) in cash and cash equivalents | 75.2 | (236.5 | ) | ||||
Cash and cash equivalents, beginning of period | 266.4 | 502.9 | |||||
Cash and cash equivalents, end of period | $ | 341.6 | $ | 266.4 |
Quarter Ended September 30, | Year Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Sales | |||||||||||||||
Wet Shave | $ | 340.3 | $ | 349.7 | $ | 1,250.1 | $ | 1,330.1 | |||||||
Sun and Skin Care | 79.5 | 75.5 | 459.8 | 449.7 | |||||||||||
Feminine Care | 77.9 | 82.5 | 308.1 | 329.5 | |||||||||||
All Other | 30.3 | 29.7 | 123.0 | 125.1 | |||||||||||
Total net sales | $ | 528.0 | $ | 537.4 | $ | 2,141.0 | $ | 2,234.4 | |||||||
Segment Profit | |||||||||||||||
Wet Shave | $ | 81.7 | $ | 87.6 | $ | 246.5 | $ | 265.2 | |||||||
Sun and Skin Care | (2.2 | ) | 3.6 | 79.9 | 79.9 | ||||||||||
Feminine Care | 11.6 | 11.5 | 48.3 | 37.2 | |||||||||||
All Other | 1.4 | 2.7 | 12.2 | 19.5 | |||||||||||
Total segment profit | 92.5 | 105.4 | 386.9 | 401.8 | |||||||||||
General corporate and other expenses | (13.8 | ) | (13.2 | ) | (57.3 | ) | (68.8 | ) | |||||||
Impairment charges | — | — | (549.0 | ) | (24.4 | ) | |||||||||
Restructuring and related costs (1) | (12.8 | ) | (20.3 | ) | (55.6 | ) | (39.9 | ) | |||||||
Harry's combination and integration costs (2) | (3.3 | ) | — | (5.1 | ) | — | |||||||||
Sun Care reformulation costs (3) | (1.3 | ) | (25.3 | ) | (2.8 | ) | (25.3 | ) | |||||||
Feminine and Infant Care evaluation costs (4) | (0.6 | ) | — | (2.1 | ) | — | |||||||||
Jack Black acquisition and integration costs (5) | (0.5 | ) | (0.3 | ) | (1.6 | ) | (5.2 | ) | |||||||
Investor settlement expense (6) | — | — | (0.9 | ) | — | ||||||||||
Sale of Playtex gloves assets | — | — | — | 15.3 | |||||||||||
Pension settlement expense | — | (5.4 | ) | — | (5.4 | ) | |||||||||
Amortization of intangibles | (4.3 | ) | (4.5 | ) | (17.7 | ) | (17.7 | ) | |||||||
Interest and other expense, net | (14.8 | ) | (12.9 | ) | (64.1 | ) | (66.6 | ) | |||||||
Total (loss) earnings before income taxes | $ | 41.1 | $ | 23.5 | $ | (369.3 | ) | $ | 163.8 |
(1) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $3.5 and $8.6 for the quarter and year ended September 30, 2019, and $0.9 and $1.4 for the quarter and year ended September 30, 2018 associated with certain information technology enablement expenses for Project Fuel. Additionally, restructuring includes pre-tax Cost of products sold of $0.6 for the quarter and year ended September 30, 2019 from inventory obsolescence of Project Fuel. |
(2) | Harry's, Inc. combination and integration planning costs totaling $3.3 and $5.1 for the quarter and year ended September 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax Cost of products sold of $1.3 and $2.8 for the quarter and year ended September 30, 2019, respectively, associated with supply chain changes on select Sun Care products. Additionally, the quarter and year ended September 30, 2018, includes pre-tax Cost of products sold of $25.3 related to inventory write-offs from Sun Care reformulation. |
(4) | Includes pre-tax SG&A of $0.6 and $2.1 for the quarter and year ended September 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(5) | Jack Black acquisition and integration costs totaling $0.5 and $1.6 for the quarter and year ended September 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Jack Black acquisition and integration costs totaling $0.3 and $3.4 for the quarter and year ended September 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the quarter and year ended September 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the year ended September 30, 2019, associated with a settlement with an investor. |
Quarter Ended September 30, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (Loss) Earnings and Diluted EPS - GAAP (Unaudited) | $ | 40.7 | $ | 19.4 | $ | 0.75 | $ | 0.36 | |||||||
Restructuring and related costs (1) | 12.8 | 20.3 | 0.24 | 0.38 | |||||||||||
Harry's combination and integration costs (2) | 3.3 | — | 0.06 | — | |||||||||||
Sun Care reformulation costs (4) | 1.3 | 25.3 | 0.02 | 0.47 | |||||||||||
Feminine and Infant Care evaluation costs (3) | 0.6 | — | 0.01 | — | |||||||||||
Jack Black acquisition and integration (5) | 0.5 | 0.3 | 0.01 | 0.01 | |||||||||||
Pension settlement expense | — | 5.4 | — | 0.10 | |||||||||||
Income taxes | (12.6 | ) | (10.5 | ) | (0.23 | ) | (0.21 | ) | |||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 46.6 | $ | 60.2 | $ | 0.86 | $ | 1.11 | |||||||
Weighted-average shares - Diluted | 54.3 | 54.2 |
Year Ended September 30, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (Loss) Earnings and Diluted EPS - GAAP (Unaudited) | $ | (352.9 | ) | $ | 103.3 | $ | (6.52 | ) | $ | 1.90 | |||||
Impairment charges | 549.0 | 24.4 | 10.14 | 0.73 | |||||||||||
Restructuring and related costs (1) | 55.6 | 39.9 | 1.03 | 0.45 | |||||||||||
Harry's combination and integration costs (2) | 5.1 | — | 0.09 | — | |||||||||||
Sun Care reformulation costs (4) | 2.8 | 25.3 | 0.05 | 0.46 | |||||||||||
Feminine and Infant Care evaluation costs (3) | 2.1 | — | 0.04 | — | |||||||||||
Jack Black acquisition and integration (5) | 1.6 | 5.2 | 0.03 | 0.10 | |||||||||||
Investor settlement expense (6) | 0.9 | — | 0.02 | — | |||||||||||
Gain on sale of Playtex gloves assets | — | (15.3 | ) | — | (0.28 | ) | |||||||||
Pension settlement expense | — | 5.4 | — | 0.10 | |||||||||||
Impact of dilutive shares (7) | — | — | (0.01 | ) | — | ||||||||||
Income taxes (8) | (75.4 | ) | 3.4 | (1.39 | ) | 0.06 | |||||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 188.8 | $ | 191.6 | $ | 3.48 | $ | 3.52 | |||||||
Weighted-average shares - Diluted | 54.1 | 54.5 |
(1) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $3.5 and $8.6 for the quarter and year ended September 30, 2019, and $0.9 and $1.4 for the quarter and year ended September 30, 2018 associated with certain information technology enablement expenses for Project Fuel. Additionally, restructuring includes pre-tax Cost of products sold of $0.6 for the quarter and year ended September 30, 2019 from inventory obsolescence of Project Fuel. |
(2) | Harry's, Inc. combination and integration planning totaling $3.3 and $5.1 for the quarter and year ended September 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax Cost of products sold of $1.3 and $2.8 for the quarter and year ended September 30, 2019, respectively, associated with supply chain changes on select Sun Care products. Additionally, the quarter and year ended September 30, 2018, includes pre-tax Cost of products sold of $25.3 related to inventory write-offs from Sun Care reformulation. |
(4) | Includes pre-tax SG&A of $0.6 and $2.1 for the quarter and year ended September 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(5) | Jack Black acquisition and integration costs totaling $0.5 and $1.6 for the quarter and year ended September 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Jack Black acquisition and integration costs totaling $0.3 and $3.4 for the quarter and year ended September 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the quarter and year ended September 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the year ended September 30, 2019, associated with a settlement with an investor. |
(7) | GAAP EPS was calculated using basic weighted average shares outstanding due to a net loss. Adjusted diluted EPS was calculated using diluted weighted average shares outstanding. |
(8) | Includes Income tax expense of $3.6 for the year ended September 30, 2019 related to the fiscal 2018 one-time transition tax from the Tax Act. Includes the impact of the Tax Act totaling $21.3 in Income tax expense for fiscal 2018 in addition to the tax impact of the other adjustments to Net Earnings and Diluted EPS - GAAP. |
Quarter Ended September 30, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net (Loss) Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 230.0 | $ | 91.8 | $ | 41.1 | $ | 40.7 | $ | 0.75 | |||||||||
% of net sales | 43.6 | % | 17.4 | % | |||||||||||||||
Restructuring and related costs | 0.6 | 3.5 | 12.8 | 9.8 | 0.17 | ||||||||||||||
Harry's combination and integration costs | — | 3.3 | 3.3 | 2.5 | 0.05 | ||||||||||||||
Sun Care reformulation costs | 1.3 | — | 1.3 | 1.0 | 0.02 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 0.6 | 0.6 | 0.5 | 0.01 | ||||||||||||||
Jack Black acquisition and integration costs | — | 0.5 | 0.5 | 0.4 | 0.01 | ||||||||||||||
Income taxes (2) | — | — | — | (8.3 | ) | (0.15 | ) | ||||||||||||
Total Adjusted Non-GAAP | $ | 231.9 | $ | 83.9 | $ | 59.6 | $ | 46.6 | $ | 0.86 | |||||||||
% of net sales | 43.9 | % | 15.9 | % |
Year Ended September 30, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net (Loss) Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 966.6 | $ | 372.0 | $ | (369.3 | ) | $ | (352.9 | ) | $ | (6.52 | ) | ||||||
% of net sales | 45.1 | % | 17.4 | % | |||||||||||||||
Impairment charges | — | — | 549.0 | 485.4 | 8.97 | ||||||||||||||
Restructuring and related costs | 0.6 | 8.6 | 55.6 | 43.2 | 0.80 | ||||||||||||||
Harry's combination and integration costs | — | 5.1 | 5.1 | 3.9 | 0.07 | ||||||||||||||
Sun Care reformulation costs | 2.8 | — | 2.8 | 2.1 | 0.04 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 2.1 | 2.1 | 1.6 | 0.03 | ||||||||||||||
Jack Black acquisition and integration costs | — | 1.6 | 1.6 | 1.2 | 0.02 | ||||||||||||||
Investor settlement expense | — | 0.9 | 0.9 | 0.7 | 0.01 | ||||||||||||||
Impact of dilutive shares | — | — | — | — | (0.01 | ) | |||||||||||||
Income tax reform | — | — | — | 3.6 | 0.07 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 970.0 | $ | 353.7 | $ | 247.8 | $ | 188.8 | $ | 3.48 | |||||||||
% of net sales | 45.3 | % | 16.5 | % |
Quarter Ended September 30, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 230.8 | $ | 91.6 | $ | 23.5 | $ | 19.4 | $ | 0.36 | |||||||||
% of net sales | 42.9 | % | 17.0 | % | |||||||||||||||
Restructuring and related costs | — | 0.9 | 20.3 | 14.6 | 0.27 | ||||||||||||||
Sun Care reformulation costs | 25.3 | — | 25.3 | 18.3 | 0.34 | ||||||||||||||
Pension settlement expense | — | — | 5.4 | 3.8 | 0.07 | ||||||||||||||
Jack Black acquisition and integration costs | — | 0.3 | 0.3 | 0.2 | — | ||||||||||||||
Income tax reform | — | — | — | 3.9 | 0.07 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 256.1 | $ | 90.4 | $ | 74.8 | $ | 60.2 | $ | 1.11 | |||||||||
% of net sales | 47.7 | % | 16.8 | % |
Year Ended September 30, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 1,032.9 | $ | 395.1 | $ | 163.8 | $ | 103.3 | $ | 1.90 | |||||||||
% of net sales | 46.2 | % | 17.7 | % | |||||||||||||||
Restructuring and related costs | — | 1.4 | 39.9 | 28.9 | 0.52 | ||||||||||||||
Impairment charge | — | — | 24.4 | 23.3 | 0.43 | ||||||||||||||
Sun Care reformulation costs | 25.3 | — | 25.3 | 18.3 | 0.34 | ||||||||||||||
Sale of Playtex gloves assets | — | — | (15.3 | ) | (11.1 | ) | (0.20 | ) | |||||||||||
Pension settlement expense | — | — | 5.4 | 3.8 | 0.07 | ||||||||||||||
Jack Black acquisition and integration costs | 1.8 | 3.4 | 5.2 | 3.8 | 0.07 | ||||||||||||||
Income tax reform | — | — | — | 21.3 | 0.39 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 1,060.0 | $ | 390.3 | $ | 248.7 | $ | 191.6 | $ | 3.52 | |||||||||
% of net sales | 47.4 | % | 17.5 | % |
(1) | EBIT is defined as Earnings (loss) before income taxes. |
(2) | Includes Income tax expense for the one-time transition tax from the Tax Act and the tax impact of the impairment of goodwill and intangible assets recorded in the third quarter of fiscal 2019. |
Quarter Ended September 30, | Year Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Earnings (loss) before income taxes | $ | 41.1 | $ | 23.5 | $ | (369.3 | ) | $ | 163.8 | ||||||
Impairment charges | — | — | 549.0 | 24.4 | |||||||||||
Restructuring and related costs (1) | 12.8 | 20.3 | 55.6 | 39.9 | |||||||||||
Harry's combination and integration costs (2) | 3.3 | — | 5.1 | — | |||||||||||
Sun Care reformulation costs (3) | 1.3 | 25.3 | 2.8 | 25.3 | |||||||||||
Feminine and Infant Care evaluation costs (4) | 0.6 | — | 2.1 | — | |||||||||||
Jack Black acquisition and integration costs (5) | 0.5 | 0.3 | 1.6 | 5.2 | |||||||||||
Investor settlement expense (6) | — | — | 0.9 | — | |||||||||||
Sale of Playtex gloves assets | — | — | — | (15.3 | ) | ||||||||||
Pension settlement expense | — | 5.4 | — | 5.4 | |||||||||||
Interest expense associated with debt | 14.6 | 15.5 | 62.6 | 68.0 | |||||||||||
Other expense, net | 0.2 | (2.6 | ) | 1.5 | (1.4 | ) | |||||||||
Adjusted operating income | $ | 74.4 | $ | 87.7 | $ | 311.9 | $ | 315.3 | |||||||
% of net sales | 14.1 | % | 16.3 | % | 14.6 | % | 14.1 | % |
(1) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $3.5 and $8.6 for the quarter and year ended September 30, 2019, and $0.9 and $1.4 for the quarter and year ended September 30, 2018 associated with certain information technology enablement expenses for Project Fuel. Additionally, restructuring includes pre-tax Cost of products sold of $0.6 for the quarter and year ended September 30, 2019 from inventory obsolescence of Project Fuel. |
(2) | Harry's, Inc. combination and integration planning costs totaling $3.3 and $5.1 for the quarter and year ended September 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax Cost of products sold of $1.3 and $2.8 for the quarter and year ended September 30, 2019, respectively, associated with supply chain changes on select Sun Care products. Additionally, the quarter and year ended September 30, 2018, includes pre-tax Cost of products sold of $25.3 related to inventory write-offs from Sun Care reformulation. |
(4) | Includes pre-tax SG&A of $0.6 and $2.1 for the quarter and year ended September 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(5) | Jack Black acquisition and integration costs totaling $0.5 and $1.6 for the quarter and year ended September 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Jack Black acquisition and integration costs totaling $0.3 and $3.4 for the quarter and year ended September 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the quarter and year ended September 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the year ended September 30, 2019, associated with a settlement with an investor. |
Year Ended September 30, 2019 | Year Ended September 30, 2018 | ||||||||||||||||||||||
Reported | Adjustments (1) | Adjusted (Non-GAAP) | Reported | Adjustments (1) | Adjusted (Non-GAAP) | ||||||||||||||||||
Earnings (loss) before income taxes | (369.3 | ) | $ | 617.1 | $ | 247.8 | 163.8 | $ | 84.9 | $ | 248.7 | ||||||||||||
Income tax (benefit) provision | (16.4 | ) | 75.4 | 59.0 | 60.5 | (3.4 | ) | 57.1 | |||||||||||||||
Net (loss) earnings | $ | (352.9 | ) | $ | 541.7 | $ | 188.8 | $ | 103.3 | $ | 88.3 | $ | 191.6 | ||||||||||
Effective tax rate | 4.4 | % | 36.9 | % | |||||||||||||||||||
Adjusted effective tax rate | 23.8 | % | 23.0 | % |
(1) | Includes adjustments for restructuring charges, impairment charges, Harry's combination and integration planning costs, Feminine and Infant Care evaluation costs, Jack Black acquisition and integration costs, investor settlement expense, Sun Care reformulation costs, the sale of the Playtex gloves assets, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act. |
Net Sales (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - Q4 '18 | $ | 349.7 | $ | 75.5 | $ | 82.5 | $ | 29.7 | $ | 537.4 | ||||||||||||||||||||||||
Organic | (6.0 | ) | (1.7 | )% | 5.3 | 7.0 | % | (4.6 | ) | (5.6 | )% | 0.6 | 2.0 | % | (4.7 | ) | (0.9 | )% | ||||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of currency | (3.4 | ) | (1.0 | )% | (1.3 | ) | (1.7 | )% | — | — | % | — | — | % | (4.7 | ) | (0.8 | )% | ||||||||||||||||
Net Sales - Q4 '19 | $ | 340.3 | (2.7 | )% | $ | 79.5 | 5.3 | % | $ | 77.9 | (5.6 | )% | $ | 30.3 | 2.0 | % | $ | 528.0 | (1.7 | )% |
Net Sales (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Year Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - FY '18 | $ | 1,330.1 | $ | 449.7 | $ | 329.5 | $ | 125.1 | $ | 2,234.4 | ||||||||||||||||||||||||
Organic | (54.7 | ) | (4.1 | )% | (0.1 | ) | — | % | (20.7 | ) | (6.3 | )% | (1.4 | ) | (1.1 | )% | (76.9 | ) | (3.4 | )% | ||||||||||||||
Impact of disposition | — | — | % | (1.0 | ) | (0.2 | )% | — | — | % | — | — | % | (1.0 | ) | — | % | |||||||||||||||||
Impact of acquisition | — | — | % | 17.1 | 3.8 | % | — | — | % | — | — | % | 17.1 | 0.8 | % | |||||||||||||||||||
Impact of currency | (25.3 | ) | (1.9 | )% | (5.9 | ) | (1.4 | )% | (0.7 | ) | (0.2 | )% | (0.7 | ) | (0.6 | )% | (32.6 | ) | (1.6 | )% | ||||||||||||||
Net Sales - FY '19 | $ | 1,250.1 | (6.0 | )% | $ | 459.8 | 2.2 | % | $ | 308.1 | (6.5 | )% | $ | 123.0 | (1.7 | )% | $ | 2,141.0 | (4.2 | )% |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - Q4 '18 | $ | 87.6 | $ | 3.6 | $ | 11.5 | $ | 2.7 | $ | 105.4 | ||||||||||||||||||||||||
Organic | (5.7 | ) | (6.5 | )% | (5.5 | ) | (152.8 | )% | — | — | % | (1.3 | ) | (48.1 | )% | (12.5 | ) | (11.9 | )% | |||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of currency | (0.2 | ) | (0.2 | )% | (0.3 | ) | (8.3 | )% | 0.1 | 0.9 | % | — | — | % | (0.4 | ) | (0.4 | )% | ||||||||||||||||
Segment Profit - Q4 '19 | $ | 81.7 | (6.7 | )% | $ | (2.2 | ) | (161.1 | )% | $ | 11.6 | 0.9 | % | $ | 1.4 | (48.1 | )% | $ | 92.5 | (12.3 | )% |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Year Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - FY '18 | $ | 265.2 | $ | 79.9 | $ | 37.2 | $ | 19.5 | $ | 401.8 | ||||||||||||||||||||||||
Organic | (13.4 | ) | (5.1 | )% | (4.3 | ) | (5.4 | )% | 11.5 | 30.9 | % | (6.9 | ) | (35.4 | )% | (13.1 | ) | (3.3 | )% | |||||||||||||||
Impact of disposition | — | — | % | (0.3 | ) | (0.4 | )% | — | — | % | — | — | % | (0.3 | ) | — | % | |||||||||||||||||
Impact of acquisition | — | — | % | 5.3 | 6.6 | % | — | — | % | — | — | % | 5.3 | 1.3 | % | |||||||||||||||||||
Impact of currency | (5.3 | ) | (2.0 | )% | (0.7 | ) | (0.8 | )% | (0.4 | ) | (1.1 | )% | (0.4 | ) | (2.0 | )% | (6.8 | ) | (1.7 | )% | ||||||||||||||
Segment Profit - FY '19 | $ | 246.5 | (7.1 | )% | $ | 79.9 | — | % | $ | 48.3 | 29.8 | % | $ | 12.2 | (37.4 | )% | $ | 386.9 | (3.7 | )% |
Quarter Ended September 30, | Year Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) earnings | $ | 40.7 | $ | 19.4 | $ | (352.9 | ) | $ | 103.3 | ||||||
Income tax (benefit) provision | 0.4 | 4.1 | (16.4 | ) | 60.5 | ||||||||||
Interest expense, net | 14.6 | 15.3 | 62.3 | 67.9 | |||||||||||
Depreciation and amortization | 24.6 | 24.2 | 93.8 | 97.6 | |||||||||||
EBITDA | $ | 80.3 | $ | 63.0 | $ | (213.2 | ) | $ | 329.3 | ||||||
Impairment charges | $ | — | $ | — | $ | 549.0 | $ | 24.4 | |||||||
Restructuring and related costs(1) | 11.9 | 20.3 | 53.7 | 39.9 | |||||||||||
Harry's combination and integration costs | 3.3 | — | 5.1 | — | |||||||||||
Sun Care reformulation costs | 1.3 | 25.3 | 2.8 | 25.3 | |||||||||||
Feminine and Infant Care evaluation costs | 0.5 | — | 2.1 | — | |||||||||||
Jack Black acquisition and integration costs | 0.5 | 0.3 | 1.6 | 5.2 | |||||||||||
Investor settlement expense | — | — | 0.9 | — | |||||||||||
Sale of Playtex gloves assets | — | — | — | (15.3 | ) | ||||||||||
Pension settlement charges | — | 5.4 | — | 5.4 | |||||||||||
Adjusted EBITDA | $ | 97.8 | $ | 114.3 | $ | 402.0 | $ | 414.2 |
(1) | Excludes $0.9 and $1.9 of accelerated depreciation for the quarter and year ended September 30, 2019, respectively, which are included within Depreciation and amortization. |
Adjusted EPS Outlook | ||
Fiscal 2020 GAAP EPS | approx. | $ 2.45 - $2.65 |
Project Fuel | approx. | 0.65 |
Acquisition and integration expenses | approx. | 0.13 |
Monograph expenses | approx. | 0.07 |
Income taxes(1) | approx. | (0.20) |
Fiscal 2020 Adjusted EPS Outlook (Non-GAAP) | $3.10 - $3.30 |
(1) | Income tax effect of the adjustments to Fiscal 2020 GAAP EPS noted above. |
Adjusted EBITDA Outlook | ||
Fiscal 2020 GAAP Net income | approx. | $135 - $145 |
Income tax provision | approx. | 45 |
Interest expense, net | approx. | 55 |
Depreciation and amortization | approx. | 90 |
EBITDA | approx. | $325 - $335 |
Project Fuel | approx. | 36 |
Acquisition and integration expenses | approx. | 6 |
Monograph expenses | approx. | 3 |
Fiscal 2020 Adjusted EBITDA | approx. | $370 - $380 |
Q4 2019 | Days (1) | Q3 2019 | Days (1) | Q4 2018 | Days (1) | ||||||||||||||
Receivables, as reported | $ | 215.4 | $ | 220.6 | $ | 223.4 | |||||||||||||
Less: Trade allowance in accrued liabilities (2) | (24.6 | ) | (25.5 | ) | (25.8 | ) | |||||||||||||
Receivables, adjusted | 190.8 | 33 | 195.1 | 33 | 197.6 | 32 | |||||||||||||
Inventories, as reported | 371.4 | 115 | 364.5 | 113 | 347.4 | 106 | |||||||||||||
Accounts payable, as reported | 218.8 | 68 | 222.7 | 69 | 229.6 | 70 | |||||||||||||
Average adjusted working capital (3) | $ | 343.4 | $ | 336.9 | $ | 315.4 | |||||||||||||
% of net sales (4) | 16.0 | % | 15.7 | % | 14.1 | % |
(1) | Days sales outstanding is calculated using net sales for the trailing four-quarter period. Days in inventory and days payable outstanding are calculated using cost of products sold for the trailing four-quarter period. |
(2) | Trade allowances are recorded as a reduction of net sales per GAAP and reported in accrued expenses on the Condensed Consolidated Balance Sheets. |
(3) | Adjusted working capital is defined as receivables (less trade allowance in accrued liabilities), plus inventories, less accounts payable. Average adjusted working capital is calculated using an average of the four-quarter end balances for each working capital component as of September 30, 2019, June 30, 2019 and September 30, 2018, respectively. |
(4) | Average adjusted working capital divided by trailing four-quarter net sales. |
Year ended September 30, 2018 | Adjustments for adoption of ASU 2017-07 | Adjusted year ended September 30, 2018 | |||||||||
Cost of products sold | $ | 1,197.6 | $ | 3.9 | $ | 1,201.5 | |||||
Gross profit | 1,036.8 | (3.9 | ) | 1,032.9 | |||||||
Selling, general and administrative expenses | 392.2 | 2.9 | 395.1 | ||||||||
Other expense (income), net | 5.4 | (6.8 | ) | (1.4 | ) | ||||||
Earnings before income taxes | 163.8 | — | 163.8 | ||||||||
Adjusted operating income | $ | 322.1 | $ | (6.8 | ) | $ | 315.3 |
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